A common platform for MFs trading in the offing

By siliconindia   |   Monday, 20 July 2009, 19:04 IST   |    1 Comments
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A common platform for MFs trading in the offing
Bangalore: In a move to modernize mutual funds (MFs) trading in India, the Association of Mutual Funds in India (Amfi) has decided to set up a common electronic platform. In this regard, Amfi has already shortlisted four entities that will develop the platform, which can enable asset managers, investors and distributors to trade, switch over and compare schemes online through a single window. The need for a shared online platform for the local MFs has strengthened especially after market regulator Securities and Exchanges of India (Sebi) recently scrapped the entry-load system and imposed restrictions on the industry. According to The Economic Times, Amfi is likely to select the entity by two weeks, following which the plan will be presented to Sebi for final approval. Amfi intends to implement the platform by March 2010. "The transaction costs for the industry could be reduced to half over the next five years," said Jaideep Bhattacharya, Chief Marketing Officer of UTI MF, who is the Chairman of Amfi panel for this project. These steps are expected to affect the finances of MFs, as they will have to reimburse MF distributors from their funds. Against this backdrop, MFs have been forced to resort to every method to cut costs that are deemed high. The platform will enable investors to trade open-ended schemes and track their portfolio through a single platform. Currently, only close-ended schemes can be traded among investors.